Property Investment has retained its popularity with Australian investors over the years and doesn’t look like it’s about to slow down any time soon.
However, with soaring property prices across parts of the country, your investment property will need certain attributing factors to ensure that you don’t end up with negative returns.
Selecting your property investment smartly will help you achieve your desires. IIG Property Investment has set up this commentary to equip you with smart strategies to choose the right investment property for you.
A large population base will create an enabling environment for long-term growth. Choosing an investment property in town or region where there aren't enough people may not be a smart investment choice for you.
Small towns can experience sudden increases in population that influence demand and especially rental values. These situations look appealing on face values however on such towns small losses is jobs or population and the development of a small number of new properties can have a devastating effect on the values
Some of the best locations are upcoming spots where population growth is expected to increase because this triggers infrastructure improvements and increase in desirability – pushing your investment value upwards. The growth of population in your desired location should ideally be more than the national average if you are looking for sustained rental demand.
Adequate infrastructure is a key point to consider when you are looking at a particular region. You’ll ideally want to choose a suburb that is well connected via public transport because not every prospective tenant has a car.
The neighbourhood or region should have enough infrastructure to support current needs including schooling, shopping, parks and sports fields as well as proximity to employment and should have a roadmap for future infrastructure development based on population growth.
Any region you choose for your investment property should have diversity across numerous economic drivers. In the long-term this will minimise the possible risks that may arise if a significant employer closes down.
Economic drives include, entertainment centres, education facilities and healthcare facilities not only the traditional industrial or business centres.
The property you choose should be in keeping with the demographic profile of the region. For instance, if you are looking at properties in family-friendly suburbs, make sure they are large enough to accommodate the needs of growing children for the best results.
The property value should be within the appropriate market segment to attract suitable rent and tenants. Too many investors choose properties based on emotions, but you must inject logic into your decisions.
Buying into the very bottom market segment can slow down capital growth, rental income and cost you in the long term. Buying into the very top market segment can affect your rental yields and leave you desperate for tenants as those with the ability to rent in the top market segment prefer to own than rent.
Conduct research to understand the market segment before investing your precious dollars.
Your property will offer tax benefits by claiming expenses for council rates, cleaning, bank charges, interest expenses, legal expenses and more.
However, to maximise tax benefits with your rental property by choosing a brand new property you can claim building depreciation and contents depreciation. These 2 items could boost you tax deductions by as much as $50,000 over the first 5 years of your investment.
Rental yield should meet or exceed the national average to be a viable investment. This means that you need to choose a property in a neighbourhood with higher rental yields than others. For this, you will need to refer to trend reports and market research to arrive at your decision. We can help you understand suburbs that offer the highest rental yields based on your investment criteria.
Your property investment is aimed towards capital growth, so you need to choose a property that will likely increase in value. This means that you need to find the right property in the right location at the right time for the right value. Unlike shares where values are recorded on a daily basis, property values are more difficult to determine. IIG Property Investment will ascertain the value of any properties it presents through a 3rd party independent property valuers to get the true and accurate valuation.
A exceptional investment property will display some stand out features that provide valuable benefits to tenants and future buyers. If you have a property just like everyone else, it may not be so appealing.
But if your property is unique, through proximity to an exceptional school, transport hub, or shopping centre, has top quality appliances or nice views you will find many more potential future buyers for your investment property.
Integrated investment group with its Queensland based Property Investment division can help you address all these important factors when you’re looking to buy an investment property for your needs. We will help you with smart financial planning tactics to help you put your best foot forward in your property investment search.